Colder weather forecasts back early U.S. natgas futures gains
NEW YORK Nov 20 (Reuters) - U.S. natural gas futures edged higher on Wednesday, backed by the colder shift in weather forecasts for later this week and next week that should force more homeowners and businesses to turn up their heaters.
Forecaster MDA Weather Services noted that both the six- to 10-day and 11- to 15-day outlooks turned colder overnight, with some much below-normal temperatures expected to stretch from Texas to the Northeast next week.
At 9:20 a.m. EST (1420 GMT), front-month gas futures on the New York Mercantile Exchange were up 9.2 cents, or 2.6 percent, at $3.648 per million British thermal units after trading between $3.549 and $3.654.
The nearby contract, which hit a 3-1/2-week high of $3.705 on Monday before closing lower, had lost 2.8 percent in the previous two sessions.
Technical traders, noting the market seemed stuck in a range between $3.50 and $3.70, said the front month needed to close above resistance in the low-$3.70s to set the stage for more upside.
But with stockpiles at comfortable levels and production flowing at a record-high pace, many traders remain skeptical of further gains unless the cold weather is sustained.
Traders and analysts are expecting the season's first inventory draw when the U.S. Energy Information Administration releases its weekly storage report on Thursday.
Withdrawal estimates range from 15 billion to 42 billion cubic feet, with most in the low-30s. That would compare with a 36 bcf decline in the year-earlier week and a five-year average drop of 2 bcf for that week.
EIA reported last week that total domestic gas inventories stood at 3.834 trillion cubic feet, just 2 percent below last year's record highs at that time, but 1.5 percent above the five-year average. Continued...